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China Shows Interest in ConocoPhillip’s Kashagan Oilfield Stake

By Charles Kennedy | Tue, 16 April 2013 21:47 | 0

The Kashagan oilfield in Kazakhstan, with an estimated 30 billion barrels of crude oil, was the largest oil discovery in the last 40 years. A multinational consortium was formed between Eni of Italy, ExxonMobil, Royal Dutch Shell, Total of France, Inpex of Japan, ConocoPhillips, and the Kazakhstani government, to develop the Kashagan oil field; production is expected to begin later in the year.

ConocoPhillips (NYSE: COP), as part of its strategy to reduce debt and increase investments in domestic shale oil and gas projects, has been selling off assets, and is trying to find a buyer for its stake in the Kashagan field.

India’s state-owned oil and natural gas corp. has made a $5 billion bid for the stake, but now the Kazakh Oil & Gas Minister Sauat MynBayey has claimed that China, represented by an unknown state-run company, has shown interest in buying ConocoPhillip’s stake.

Related article: Proposed Kazakh-Indian Pipeline a Long Shot at Best

Kazakhstan also has the option of buying the stake; actually they have the pre-emptive right to buy the 8.4% stake if they so wish, although they must make their decision before the end of May.

Kazakhstan is home to three percent of the world’s recoverable oil reserves and in recent years has tried to bring those reserves more under the control of the government and state-run oil firm KazMunaiGas in order to earn larger revenues from the sector. This may mean it is more likely that Kazakhstan will take the opportunity to buy the stake and consolidate a larger share of the consortium.

By. Charles Kennedy of Oilprice.com

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